Mortgage Refinance Calculator
Compare your current mortgage against a refinance offer — break-even point, monthly savings, and the true lifetime cost.
Refinance Smart, Not Just Cheap
When Refinancing Makes Sense
Rate drop of 0.75-1%+: The traditional rule of thumb for the savings to comfortably clear closing costs
You'll stay past break-even: If closing costs take 30 months to recover, plan to keep the home at least that long
Removing PMI: If your home value has risen, refinancing can eliminate PMI even at a similar rate
Shortening the term: Moving from a 30-year to a 15-year locks in massive lifetime interest savings
Key Insight: The break-even point is the single most important number: closing costs ÷ monthly savings = months to break even. Move before then and refinancing loses money.
The Term-Reset Trap
Refinancing 27 remaining years into a fresh 30-year loan restarts the amortization clock. Your payment drops — but you pay interest for 3 extra years, often wiping out the "savings."
Pro Strategy: Refinance to the lower rate but keep making your old payment amount. You get the lower required payment as a safety net while paying the loan off even faster than before.
Understand the Closing Costs
Typical cost: 2-5% of the loan amount ($7,000-17,500 on a $350K loan) covering origination, appraisal, title, and recording fees
"No-cost" refinances: Costs are rolled into the rate or balance — you still pay them, just invisibly
Points: Paying 1% of the loan up front typically buys the rate down ~0.25%. Worth it only if you stay long enough
Shop it: Get Loan Estimates from at least 3 lenders within a 14-45 day window (credit bureaus count them as one inquiry). Fees vary by thousands for identical rates.
Avoid These Refinancing Mistakes
- ❌ Comparing only monthly payments, ignoring the term reset
- ❌ Refinancing right before selling the home
- ❌ Taking cash out to pay off credit cards, then running them up again
- ❌ Accepting the first offer without competing Loan Estimates
- ❌ Forgetting that a "no-cost" refi hides the costs in the rate
Your Refinance Action Plan
- Run your numbers in the calculator — note your break-even month
- Be honest about how long you'll stay in the home
- Check your credit score; 740+ gets the best pricing
- Collect Loan Estimates from 3+ lenders in the same two weeks
- Compare APR and total fees, not just the headline rate
- If you refinance, consider keeping your old payment amount